"We may be, in the course of 2026, coming to a point where the whole thing becomes unsustainable, because so much of the Russian economy has been distorted so much by the building up of the war economy at the expense of the civil economy. I think defying the laws of economic gravity can only go on for so long."
"The EU has imposed an unprecedented 19 rounds of sanctions on Russia since the full-scale invasion of Ukraine in 2022, targeting more than 2,700 individuals and entities, and halting trade across vast economic areas including energy, aviation, IT, luxury and consumer goods, diamonds and gold. O'Sullivan, who has more than four decades' experience in the EU institutions, was appointed EU special envoy for sanctions in December 2022 with a remit to counter their evasion and circumvention."
Western sanctions have had a significant impact on the Russian economy and risk making its war-driven economic model unsustainable by 2026. Much of the Russian economy has been redirected toward a war economy at the expense of the civil economy. Intense Russian attacks have targeted Ukraine's energy infrastructure amid a bitter winter with temperatures in Kyiv near -20C. Reported launches of drones and missiles recently increased compared with January 2025. The Russian economy faces falling oil revenues, inflation around 6%, and interest rates near 16%. The EU has imposed 19 sanction rounds since 2022, targeting thousands and key trade sectors, with an envoy tasked to counter evasion.
Read at www.theguardian.com
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